Pending home sales — which measure the amount of contracts signed to purchase previously owned homes — rose to the highest level in nearly two years.

The NAR’s index rose 4.1% on a monthly basis to 101.4, the largest amount since April 2010 when buyers rushed to the market to take advantage of federal tax credits. Economists were expecting a 1.3% monthly gain.

Sales also showed a 12.8% year-over-year rise.

The report has given a bump to homebuilder stocks this morning. PulteGroup is up 7%, Lennar rises 3.5% and KB Home jumps 3.2%. Toll Brothers gains 2.3% and D.R. Horton rises 1%.

Broad market indexes also moved higher after the housing data. At last glance the Dow rose 52 points, with Wal-Mart and Chevron leading the way. The S&P 500 tacked on 1 point and the Nasdaq Comp advanced 8 points.

To be sure, while the housing data look good on the surface, the report is far from guaranteed that it will translate into higher sales.

“A substantial number of sales contracts are failing to meet underwriting standards and/or other loan criterion as sales contract cancellations remain elevated,” writes Steven Wood, chief economist at Insight Economics. “Although a hopeful trend, home sales are still at a relatively subdued level.”

But for now, investors seem to be interpreting the data as a hopeful sign that housing demand is slowly making a comeback after the severe housing bust and mortgage meltdown.

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